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Archive for August, 2010

The Education Bubble

August 31st, 2010 at 08:10 am

Posy from MyMoneyBlog.

[url]http://www.mymoneyblog.com/charts-college-tuition-vs-ho...

The post shows graphs of the Education bubble compared to the housing bubble and the huge increase in healthcare costs.

Kind of interesting. Clearly all of these cost increases can be largely explained by the available of easy debt.

I commented on this before when we were looking for a neurosurgeon for dh's surgery. My MIL is crazy, so who knows, but she swore that a #1 surgeon in LA would only charge $10k for the surgery, and would even travel up north to do so. This was his fee - our insurance would cover the rest of the surgery and recovery. (HE didn't make us the same offer so lord knows if this is really true - she is on another planet sometimes). But, the whole thing sounded very weird to me. But then you think about it. For the last decade people haven't thought twice about cashing in their equity to afford the best doctors for any medical procedure, etc., etc. Heck, I know a pile of more lower class/lower middle class moms who have been getting boob jobs and tummy tucks. Price is no object when you have $100k equity at your disposal.

Suddenly the gravy train has run its course, and $10k cash in hand is better than the $30k that no one can afford?

OF course, the point of the post was that education is the BIGGEST bubble. By a mile!

Well, that isn't very surprising. Do we know very many people who have really considered the financial ramifications of their college choices? I personally feel like one in a million, with my own very practical approach to college. The prevailing attitude is that "It doesn't matter how much it cost - it will be worth it."

Isn't it amazing how wide reaching and devastating the affects of the debt bubble were? It's just mind boggling.

American Express Rewards

August 30th, 2010 at 06:37 pm

A credit card offer caught dh's eye.

Comes with a Kindle and a $100 Amazon gift card. (IF we spend $200 in the next couple of months - um, I think we have that covered).

Will probably get it.

First year is free and then the membership is $175. *choke choke*

Poor, naive dh tells me, "I think I will call and ask them if I can just cancel the card after I get the reward."

Oy vey!

I told dh I would look around online to see if there were any catches. Rolleyes

Dh is of high intelligence, but sometimes when it comes to this stuff, I do have to roll my eyes. "Yes, dh, I am sure they will be honest and up front with you. It's not like they will just say anything to get you to sign up."

But a quick google search shows me these offers are pretty common. & that there is ample time to cancel it before the insane annual fee kicks in.

Dh and I do these offers all the time. It's probably been a while. But our credit scores both average about 800. So, eh. I haven't found it amount to make much difference what we do (opening and closing cards over the years). Apparently, paying our bills on time makes up most of the score.

This one is all dh. He will just get it in his name, and he can deal with closing it.

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We will probably give the Kindle as a Christmas gift to someone in the family. Not sure who yet. Dh's family really wanted to get him one before his surgery. Would have been useless because he did not feel up to reading for quite a while. & we declined the nice offer because we could never see spending all the money on books, etc. We prefer the library! So, I don't think it's the greatest offer, for our own purposes. But, it may pay for Christmas. A kindle + $100 to spend at Amazon should cover Christmas pretty well.

Low Key Weekend

August 30th, 2010 at 07:45 am

**The weather Gods were super nice to us. We had an all day soccer tournament on Saturday. It never got hotter than 75F. About 30 degrees cooler than average?

Definitely the coolest summer day, in decades.

**Yesterday I scrubbed the floors. Which is something I never have (make) time for. So, this means, I am feeling pretty caught up.

BM has a hand-me-down desk in his room. I was making sure their rooms were picked up and vacuumed, when I asked BM if he wanted to move his homework to his desk. For now, he has taken over the kitchen island, which is fine. He can be with the family and ask questions while he does homework. But, at the same time, he usually doesn't need much help, and might as well use the desk in his room.

**For the long weekend next weekend I Was thinking I really need to do a Goodwill sweep throughout the house. I found a couple of things around the house, and the kids' room just seems piled high with junk. They don't have a LOT of toys, but there are just little happy meal and birthday party favor type crap all over the place. I just despise that stuff. I swear we just threw away a bag of useless crap. I have NO IDEA where it all comes from!!!!

I just need to go through every room and make another pile.

**Nickel and Diming continues. LM's teacher asked for $5 for a project. Soccer asked for a $10-$30 clinic. We are passing on the time and money for the clinic. I have the means to handle all this stuff, but I can tell having the 2 kids in school is just going to compound everything. Plus, the extra-curriculars are asking for more money with budget cuts, too.

I know the new Kinder parents enthusiasm for parties and stuff will annoy the hell out of me.

**Dh has already volunteered 6 hours at Scholastic since school started. He is committing 1 hour a week to each classroom, and a couple of hours a week at the public TV station (in addition to the long weekend/night pledge shifts he always does). Plus, he is making progress on home video edits and such. He is keeping plenty busy. We may not be made of cash these days, but I think we are doing our fair share to help.

More Random Stuff

August 27th, 2010 at 02:13 pm

**Talked to the mortgage broker who did our last refi. "Tell all your friends they only need 5% equity + no PMI!" Ugh. Doesn't matter much - either you are upside down or you have a lot of equity. Not much in between, around here. I know a few people barely upside down who are desparate to refi (& the really upside down). But have yet to come across anyone with just a wee bit of equity. I thought the FHA requirement was still only 3.5% down, anyway. MEaning, I don't think the 5% equity thing is that much of a surprise or novelty, all things considered.

**The school situation has been pretty sweet. There is a big push to walk to school and all that. That's fine and dandy, but by nature of the school (it's not the neighborhood school - it's a public charter - and kids come from all over), walking is only feasible for a very few.

So, ironically, we walk to/from school all the time. I suppose we are "weird," when we think of some of our neighbors who drive everywhere (like the couple of blocks to the pool? One neighbor behind us regularly drives one block, rather than walk.. ???)

Yes, if I think about it, we are weird. Big Grin

BUT, anyway, I don't know whose bright idea this was, but since so many people can't walk, they just encourage everyone to drop their kids off at the corner shopping center, and walk to school from there. I imagine all this does is move the traffic mess from the school to the shopping center. One would wonder how the very small handful of businesses feel about this, but maybe it generates sales for the drug store over there - who knows.

As for me, I drive the kids to school, because it's on the way to work. I would avoid picking them up in the car at all costs - even if I have to park across the street and walk over. But morning isn't too bad, and it doesn't much matter. It's on the way, so I pull over a few seconds and toss them out the car.

But, the school is REALLY into this walking thing, so I had the passenger loading zone to myself today. Kind of funny. As stupid as I think it is, I guess I will just enjoy.

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**I saw this question recently posed in a blog: "If you could live anywhere, where would you live?" As replies poured in about tropical islands and exotic locales, all I Could think to answer was, "Close to my family." The events of the past year (almost losing my dad, facing dh's own mortality) have definitely sealed the deal on that answer. In fact, I have spent most of the past year thinking to myself, "Thing goodness we didn't move!" Because, we were pretty close to moving out of state just a few years back.

Positive Thinking

August 27th, 2010 at 07:23 am

I think my goal for 2011 will be not to spend any money. Big Grin I was just saying how I am doing just dandy on my savings goals, but expenses are another story. Even before this latest doozy. So, maybe if I put my mind to expenses. Try to will Murphy away. It's not ALL Murphy, but we have had plenty of Murphy thrown in, no doubt. It all started when I smashed my car door last year, and hasn't seemed to let up!

That said, what's done is done, and there is nothing I can do about it.

How it this for positive thinking? Since our upcoming Hawaii trip comes with free airfare and free hotel, I decided to just pretend like the massive dental bills are really for the Hawaii trip. It's hard to get upset about a couple of thousand dollars when you are spending a week in paradise for free. Good timing?

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Of course, I had a good talk with a friend. She was saying how her neighbor's teenaged child kept losing his retainer. Ouch!

& suddenly it hits me - that my 7yo will be responsible for a $500 retainer. Yikes!!!!!

The plus side is that we do not put anything disposable in his lunch. So we will talk to him about putting it inside his lunch bag at lunch. If he forgets it there, whatever. We will have to check after school. But I don't necessarily see much throwing away, unless he buys lunch and sets it on the tray. Ugh... Of course, if he loses it that way, a no school lunch policy might be the result.

I hadn't thought of any of this, but was a good heads up. She told me, "I am sure your kid is much more responsible than my neighbor's son." Um, the 7-year-old? I am not so sure! He can't even remember to take his backpack, after 2 years of school. Lord help me!

Random Observations

August 26th, 2010 at 07:16 am

I've noticed strange little things about the economy.

I had been noticing very few trucks on the road, when driving long distances on the interstate. I don't know if there is less, or if they are driving faster. Or both? I just rarely seem to pass any trucks in the 70mph zone, anymore.

Of course, last night I saw plenty of trucks. Way more than I have lately. Hmmmm...

& then, at seminars, suddenly, no pens. They usually always set out pens and paper (at hotels and such). & now - no pens! Just a funny/random observation. No more budget for pens, eh?

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I saw a Tesla roadster yesterday. Sweet!

I think we saw one when we were driving back from Monterey. Know I had seen one recently - not 100% sure where. Before that, the only one I had seen was in my neighborhood. Spotted once, many years ago. Meanwhile, every time I am driving in the Bay Area I think, "You think I'd see more Teslas."

& so I saw one yesterday, right around Palo Alto/Stanford.

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Ugh. I picked a terrible time to go to the Bay Area. I usually don't encounter much traffic on my daily commute. But last week, there were 3 times that there was an accident or fire at my exit. Then there was a fire by my work. Traffic traffic traffic. & that's about how my day went yesterday. Traffic traffic traffic. The brakes got a workout. Was just unusually heavy traffic, everywhere.

I actually waited out the commute traffic and left around 7pm to drive home. So I thought. They had done a lot of work and widened one section of the freeway to about 20 lanes it felt like. & I Was just STUCK in traffic for the first 60 miles or so. I told dh that it all seemed to be commute - no accidents. & lord knows why so backed up since there seemed to be twice as many lanes as usual, at the worst of it.

As gripey as I was, I can appreciate our own region. The traffic can be pretty terrible for certain commutes, but the commute is fast. It's over and done with within a couple of hours. I Can drive anywhere at 8am or 6pm, and the cars are off the road. & here I am sitting at 8pm, in commute traffic from hell - these people who commute 60+ miles each way so they can afford a house.

Gee, I wished I lived in the middle of nowhere, so I could spend hours in my car every day? That is the life of most of our family and friends. Clearly, we don't *get* it!

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I started reading "Predictably Irrational" yesterday. It is about behavioral economics. Wow, a very interesting read!

There is no doubt some very interesting knowledge to gleam, by reading the book. I am about 50 pages in. I have 2 observations thus far.

1 - Having been raised frugally, I have an extreme leg up. If nothing else, I just haven't necessarily been "trained" in the social norms that the average person has. For example, my first car cost $1500. There was a chapter about price anchoring and how the first cost we associate with an item, tends to leave a particular imprint. I thought about that in terms of cars. If the average person spends $10k-$20k on their first vehicle, and if I spent $1500, then I expect cars to cost significantly less than the average person.

All that said, a lot of that can be erased by the fact that I expect an average home to cost about $800k. Big Grin They pointed out that people that move from High Cost areas to Low cost areas, tend to spend more. Like what they spent in the high cost area. Interestingly, both our homes that we bought cost the same. One was a small condo, and the other is just a large/luxurious house. Same price. I've always been open that prices that seem high to the locals are "dirt cheap" to us. ($300k for a house? A STEAL!) Without that price anchor we probably would have bought a much more modest home.

2 - #2 probably all leads back to #1. For some of the experiments and stuff I didn't quite get it. I just don't think like most people, I suppose. (Don't get me wrong - for a lot of things - I think like most people). But the chapter about "free" stuff was just kind of silly to me. Believe me, I am 100% sure I have acted irrationally for something free here and there. BUT, there were a lot of experiments about the difference between charging a nominal amount (say, a penny or a dollar) for something and how people wouldn't pay it. But they would take it if it were free. Amazon's free shipping was used as an example. Whereas to me, Overstock's $1.99 shipping is just a good as a policy as Amazon's free shipping. Plus, with Overstock, you don't have to spend $25 or whatever to get the $1.99 shipping. They are both BARGAINS when it comes to shipping, to me. There was also mention of people tending to hoarde free stuff that they don't want or need. Just not something I tend to do?

Ugh!

August 25th, 2010 at 09:41 pm

I guess Murphy is here to stay for a while longer. It's been forever? Rolleyes

Another couple of thousand of dental bill, for the kid.

One cracked filling, which I am not thrilled about. Have to look into that one more. (He grinds his teeth? Fine, but I grind my teeth like crazy, and I have some pretty ancient fillings. I wish my dentist would touch him with a ten foot pole. He just refuses to do fillings on kids, though BM doesn't even mind it. That's the only good thing. Or maybe it's bad because he doesn't have a real fear of cavities).

One or 2 new cavities. Rolleyes

Some preventitive work. He finally has 3 molars ready for sealant. (Not that it matters - that's not his cavity problem. But, maybe it will help). They don't bother with the baby teeth. Which is probably fine since not where his cavities are, as I mentioned.

Some more teeth pulled and a retainer. I wouldn't even bother with a second opinion. I know these dentists are good and honest (unlike most I have ever seen), and this is the story of my life. This is why I have been trying to save, well ahead, for orthodontia. I can only blame my genes. & as dh said, they aren't making any money pulling teeth and giving him a retainer. The whole cavity thing was diagnosed by my forever dentist, in the first place.

It is what it is.

We have to be a little better about his hygiene. So we have to treat his teeth like a third child or something - so be it. We know better, but it all kind of fell by the wayside since dh's surgery. Been preoccupied and then got out of our elaborate oral hygiene routine.

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The silver lining is that LM has perfect teeth, like usual. HE is low maintenance, like the rest of us. Cavity wise, anyway. He will probably have horrendous orthodontia bills. But, without losing any teeth yet, he's cheap I guess. Until then...

These dentists are being a little more proactive than mine was a few decades ago. So, I can only hope that helps a little bit with future orthodontia work. I had a LOT of teeth pulled, but nothing like a retainer, so young. Will cross my fingers that it helps.

Here's to better news tomorrow.

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Dh is being all whimpy about his car A/C. I told him I would drive the flipping thing then. Rolleyes I don't think it's an expensive fix, but I could just care less about it right now. Money is flying out the window! I think I rather sweat.

Jinxed It

August 24th, 2010 at 04:56 pm

I've probably said before, but we have never had AC problems before getting newer vehicles. There was one year where I swear just about everyone I knew, who was too proud to buy a used car, or keep a car more than a few years, were all without AC and couldn't afford to fix the AC in their cars. So, you know, you just have to roll your eyes when everyone looks down at your older car choice, but all you know is you have never had to live without AC in your car while it was 110 degrees outside.

So, dh's AC went out last summer. (2001 vehicle - by far one of our newest vehicles). This would be the first AC issue for either of us, in 16 years of car ownership. The mechanic said it was nothing and just recharged the AC. So, no biggie.

It's been about a year. So, Sunday I was driving somewhere and the AC stopped blowing ice cold. I noticed the car starting getting kind of muggy. I kind of shrugged to myself, because it has been unusually cool. I just thought, "Well, it's the end of August, whatever." I can put that one off for quite a few months! Phew.

Of course, the thought did cross my mind that September could be hotter than Hades. Have seen that predicted by the weather experts.

BUT, as quickly as it had stopped working, it kicked back on - ice cold air. Double phew!

I did mention it to dh.

So, today is apparently 106F degrees. {Ironically, the weather forecast says 75F degrees for Sat/Sun. 75F! This is absurd. 106F is a pretty normal summer day for Sacramento}.

So I was talking to dh at some point today, and he tells me, "You are so lucky you didn't drive my car today. It's a million degrees outside and the AC stopped working!"

Aw, crap.

I was going to drive his car today, but he really prefers to drive his car, and he had an errand to run for ME today. I told him if he also got his oil changed, I'd leave him his car. Good move, I suppose. Of course, he wouldn't have had to gone anywhere if not working on my honey do list. Poor guy.

I'm still leaning on ignoring it until next spring. But if September ends up Hotter than Hades, we may change our minds. Honestly, during that summer when everyone's AC was broken I was just, "O.M.G." I think it can be pretty unsafe to be driving around in a hot car when it is well over 100F degrees. With small kids!?! When dh's AC was out I kept an ice cold water bottle with me at all times. I'd just carry a water bottle everywhere and stick it in the freezer between trips. It worked okay, but I Am sure it would be quite easy to get heat stroke if you are not careful.

Anyway, time to break out the old freezer water bottle trick... According to the weather forecast, it is smooth sailing the next 10 days anyway. A whole whopping 75F degrees and all. I can only cross my fingers that September will be normal-ish.

Saving isn't the problem...

August 24th, 2010 at 07:25 am

Aaaaaahhhhhh...

I am not quite sure why the last couple of months have been so crazy. Like the starts aligned. In a bad way.

But this week, I find myself with nothing but free time. How the heck did that happen? I had a very relaxing weekend!

Not much planned for the next 2 weekends, though BM does have a soccer tournament.

I find myself feeling so relaxed and content when I went to bed last night. All I could think was, "What next?" Life - there is always something.

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LM is doing better with school than I ever could imagine. He is in such a GOOD mood. I am furrowing my brow because Mr. Extrovert wild child had a rough adjustment with school. Just a few weeks of being overly tired. Then he adjusted, and that was that.

LM is the complete polar opposite. HE is so sensitive and shy - and obviously he thinks school is the best thing ever. (I've never seen him happier!) I kept telling dh we would have to put him to bed earlier! But no - he is just fine. ???????

Again, what next?

Going from home full-time to school full-time should never be this easy. But, I will enjoy his chipper mood and excitement about school.

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This week will probably go by fast. I have a seminar in San Francisco tomorrow. Will stay with my parents tonight, and probably visit with friends or family for dinner before driving home tomorrow night. I am just winging it.

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The kids have dental and doctor visits this month, and the cat has a follow up appointment (more tests to make sure her infection has cleared). HEck, dh is due for another MRI. We are putting it off a month - until we get back from Hawaii. Didn't want any bad news to put a damper on our trip. Plus, regardless, we have to talk about this whole radiation thing. His doctor thinks he should get it anyway. We just wanted to put it aside for 6 months and regroup. Boy did that 6 months go fast!

Anyway, not something he will talk about in Hawaii!

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I am doing just dandy on my goals. Haven't updated much on them because I am not thrilled with the bigger picture.

I will hit $11k in savings in September, which means I can easily put $4k away in my IRA, as was my goal. (I already put away $1k, so leaves $1k per month for the rest of the year - to meet my goal).

That said, I haven't really increased my savings balance.

About $5k in medical bills, $1k vet bills, $2k to paint house, $1k for dh's TV, $1k for Denver, plus some smaller Hawaii expenses and a mattress for LM.

Yeah, that all adds up to about the $11k I saved. Gee, no wonder I am not getting anywhere.

Boy, this year has been unusual. We just haven't had anything in the realm of this spending, like ever. So, I just have to keep telling myself that. We may have easily had 5 years prior where we didn't have any big purchases. & in the grand scheme of things, it's not horrible. It's just really setting me back on my goals. I just want to get cash to a comfortable spot (for us) so we can move forward with everything else. I feel the cash is an extra pressing goal with the economy. We've been feeling it at work this year, for sure (cut benefits, a layoff, etc.).

I am trying to be patient. Dh tells me that he will probably look for work in one year. I am trying to tell myself that most of my perceived money shortfalls are moot if he is working in the year anyway. But, at the same time, he has spent about 2 of the last 8 years looking for work. So, being ready to work doesn't really mean a lot. (Couldn't find a minimum wage job when the economy was good??? Was very disconcerting. Before getting a degree, finding a crap job was never a problem). We have always realized that he may have to return to University to get his foot in the door. So, in one year's time, will we be flush with income? Or deep in University bills? Or just spinning our wheels some more.

I can't talk about most of this stuff with anyone. To my friends? "You have no non-mortgage debts, and your spouse hasn't worked in almost a decade? What are you worried about????" Plus, we are rare with home equity. Their answer would just be to borrow from the home, in emergency. (That's not "real" debt!)

Of course, if I wasn't worried, I could quite easily fall into financial disarray. Trying to stay where I am at. It's not easy as it looks, I suppose. I don't think most people realize that life isn't all roses and peaches just because you make certain financial goals. It's always work. IT may be easier, but it will always be work to strive for financial comfort. Plus, since having kids, we have mostly slid backwards. Have always considered this rather temporary. I am u